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UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 37814 / October 11, 1996
Investment Advisers Act of 1940
Release No. 1591 / October 11, 1996
Investment Company Act of 1940
Release No. 22277 / October 11, 1996
Administrative Proceeding
File No. 3-9163
_______________________
: ORDER INSTITUTING PROCEEDINGS
In the Matter of : PURSUANT TO SECTIONS 15(b),
: 17A(c)(4)(C) AND 19(h) OF THE
: SECURITIES EXCHANGE ACT OF 1934,
PAUL L. PARSHALL : SECTION 9(b) OF THE INVESTMENT
: COMPANY ACT OF 1940, AND
: SECTION 203(f) OF THE INVESTMENT
_______________________: ADVISERS ACT OF 1940, MAKING FINDINGS
AND IMPOSING REMEDIAL SANCTIONS
I.
The Commission deems it appropriate and in the public
interest that administrative proceedings be instituted pursuant
to Sections 15(b), 17A(c)(4)(C) and 19(h) of the Securities
Exchange Act of 1934 ("Exchange Act"), Section 9(b) of the
Investment Company Act of 1940 ("Investment Company Act"), and
Section 203(f) of the Investment Advisers Act of 1940 ("Advisers
Act") with respect to Paul L. Parshall ("Respondent").
II.
In anticipation of these proceedings, Respondent has
submitted an Offer of Settlement ("Offer") which the Commission
has determined to accept. Solely for the purpose of these
proceedings and any other proceedings brought by or on behalf of
the Commission or to which the Commission is a party, and without
admitting or denying the findings contained herein, except that
Respondent admits the matters described in paragraphs III.A.,
III.B., III.C., III.D. III.J. and III.K. of this Order, the
Respondent has consented to the findings and sanctions set forth
below.
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Accordingly, IT IS ORDERED that proceedings pursuant to
Sections 15(b), 17A(c)(4)(C) and 19(h) of the Exchange Act,
Section 9(b) of the Investment Company Act, and Section 203(f) of
the Advisers Act be, and they hereby are, instituted.
III.
On the basis of this Order for Proceedings and the Offer
submitted by the Respondent, the Commission finds that:
A. Republic International Corporation ("Old Republic") was
incorporated in Utah in 1981 and was involuntarily dissolved
by the State of Utah in 1992 for failure to file its annual
report. Old Republic's common stock has been registered
with the Commission pursuant to Section 12(g) of the
Exchange Act since November 11, 1989;
B. Since June 20, 1991, TransGlobal Securities, Inc.
("TransGlobal") has been registered with the Commission as a
transfer agent pursuant to Section 17A(c)(2) of the Exchange
Act and Parshall has been associated with TransGlobal at all
times relevant to this proceeding;
C. From March 21, 1991, until June 3, 1996, Parshall was
registered with the Commission as an investment adviser
pursuant to Section 203(c) of the Advisers Act;
D. Since December 9, 1993, Greystone Capital Group
("Greystone") has been registered with the Commission as a
broker-dealer pursuant to Section 15(b) of the Exchange Act
and Parshall has been associated with Greystone from
December 1995 to May 1996;
E. In July 1993, Parshall incorporated a new company in
the state of Utah with the same name as Old Republic,
Republic International Corporation ("New Republic"). Upon
the incorporation of New Republic, Parshall caused
TransGlobal to issue 37,507,423 shares of common stock in
New Republic to himself. At the same time, Parshall also
caused TransGlobal to issue shares of common stock in New
Republic in the same names and in the same number of shares
as were held by the shareholders of Old Republic;
F. In or about September 1995, Parshall arranged for New
Republic to assume the identity of Old Republic for purposes
of reporting with the Commission. On September 25, 1995,
Parshall caused New Republic to file with the Commission
joint Forms 10-K for the years ending December 31, 1990,
1991, 1992, 1993 and 1994. He then caused New Republic to
file Forms 10-Q for the quarters ended March 31, 1995 and
June 30, 1995. In these filings Parshall represented that
Old Republic's filings with the Commission had been made
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current. Parshall failed to disclose in New Republic's
filings the actual corporate histories of Old Republic and
New Republic, as described herein and in subparagraphs A.
and E. above;
G. On or about September 21, 1995, Parshall caused Axiom
Security Solutions, Ltd. to acquire a 90% controlling
interest in New Republic. In connection with that
transaction, Parshall sold his stock in New Republic to
Axiom Security Solutions, Ltd. for $150,000;
H. After the acquisition, New Republic changed its name to
Axiom Security Solutions, Inc. ("Axiom") and changed its
address to Ontario, Canada. During October 1995, Axiom
became quoted on the National Association of Securities
Dealers' OTC Bulletin board. Axiom's common stock has been
quoted on the OTC Bulletin Board from October 1995 to the
present;
I. During the time period relevant to this proceeding, the
common stock of Old Republic, New Republic and Axiom was not
registered or approved for registration upon notice of
issuance on a national securities exchange, nor were such
securities authorized, or approved for authorization upon
notice of issuance for quotation on an automated quotation
system sponsored by a registered securities association, nor
were such securities issued by a registered investment
company. At all times relevant to this proceeding the price
of Old Republic, New Republic and Axiom common stock was
less than five dollars per share. At no time relevant to
this matter did Old Republic, New Republic or Axiom have net
tangible assets in excess of $2,000,000 nor average revenue
of $6,000,000 for a three year period;
J. On September 30, 1996, the Commission filed a civil
injunctive action in the United States District Court for
the District of Utah against Parshall alleging that Parshall
violated Section 17(a) of the Securities Act and Section
10(b) of the Exchange Act and Rule 10b-5 promulgated
thereunder. The complaint alleged, among other things, that
Parshall prepared and filed with the Commission and
disseminated to the public materially false information
regarding Old Republic, New Republic;
K. On October 1, 1996, the United States District Court
for the District of Utah issued an order of permanent
injunction against Parshall enjoining him from further
violations of Section 17(a) of the Securities Act and
Section 10(b) of the Exchange Act and Rule 10b-5 promulgated
thereunder; and
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L. By reason of the conduct described in paragraphs III.A.
through III.I. above, Parshall willfully violated Section
17(a) of the Securities Act and Section 10(b) of the
Exchange Act and Rule 10b-5 promulgated thereunder.
IV.
In view of the foregoing, it is in the public interest to
impose the sanctions specified in the Offer submitted by the
Respondent. Accordingly, IT IS ORDERED that:
The Respondent, Paul L. Parshall be and hereby is:
A. Barred from participating in an offering of any penny
stock; and
B. Barred from association in any capacity with any
broker, dealer, investment company, investment adviser, transfer
agent, or municipal securities dealer.
The sanctions ordered herein shall become effective
immediately.
By the Commission.
Jonathan G. Katz
Secretary